Mr Osborne gave the strongest indication yet that RBS could be broken up into a "good bank" and a "bad bank". Laying the groundwork, he outlined three tests to determine this - "if it supports the British economy; if it’s in the interests of taxpayers - and if it accelerates the return to private ownership".We are sceptical - "the good rump of the bank that remains could be somewhat duller and less dynamic". But Mr Osborne's move is modestly welcomed by Nils Pratley in the Guardian, who writes that "the assembled forces of Lord Lawson and other members of the Banking Commission, the governor of the Bank of England, and business secretary Vince Cable have scored a notable victory." The FT (£) has a useful summary of the pros and cons of an RBS split.

One interesting aspect of Mr Osborne's speech was a "with hindsight" criticism of the nationalisation of RBS in 2008, saying that the bank should have been split at the time. Mr Osborne admitted that he "didn't suggest it in opposition" but it could be read as light criticism of Alistair Darling's role - potentially significant given the decent chance of Mr Darling's return to the Labour frontbench after the Scottish independence referendum.

Conservative organisation is a mess of special agendas, secret influence, and back-channels of communication. Contempt for traditional party structures is complete, meaning that conflicting messages and operational incompetence have become the hallmark of the Tory machine.

The solution? Peter suggests the need for a strong chairman "with the vision and substance to shape his own election-winning machine" to increase Dave's chances of remaining PM. He suggests Boris, though I'm not convinced the arrangement would work.

Meanwhile, the inclusion of Sir Michael Hintze on the Queen's Brithday Honours list has been explained. Far from being the result of his Conservative Party donations, Sir Hintze was awarded his peerage in spite of concerns from Dave. It was driven by charities who Mr Hintze has given over £30 million to, reports Richard Kay in the Mail.

David Cameron is running scared of House of Lords reform: that's the verdict of Nigel Farage, complaining about Mr Cameron's inaction on proposals that the appointment of peers should be based on results at the previous General Election. Mr Farage writes that, "What is clear is that he is afraid of a bank of Ukip peers sitting on the red benches making life even more difficult for his coalition than they are already doing themselves" in this month's Prospect magazine. Ukip currently only have three peers in the Lords.

CUTS? YOU AIN'T SEEN NOTHING YET

The next government will have to cut spending by 50% more than this government is if it is to meet the current deficit target. That's the stark verdict of new research by the Resolution Foundation thinktank, reported in The Guardian. There is also yet another reminder of the problems caused be an unbalanced approach to tackling public spending: if departments continue to be cut, the Foreign Office will have had its budget reduced by 64% between 2010-11 and 2017-18.

The Work Programme was one of the Government's flagship schemes to combat unemployment. That was the idea, anyway. Results from employers’ organisations taking part in the scheme suggest that two-thirds of those who been on the Work Programme for over a year are still without work - including 90 per cent of disabled and long-term sick adults who have been receiving employment and support allowance. And what of the official figures? These are released on June 27 - coincidentally, a day after the Comprehensive Spending Review.

TWEETS AND TWITS William Bain is confused by the SNP's plans for banking:

@William_Bain: Salmond confirms he wants separate Scotland's banks to be regulated by the BoE & by a Scottish regulator - who would resolve a failed bank?